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Stocks Bounce Back From Heavy Losses in Unsettled Session

Stocks bounced back from heavy losses earlier Wednesday as crude oil recovered its highs and investors shook off weakness in the services sector.

The S&P 500 was down 0.48%, the Dow Jones Industrial Average added 0.03%, and the Nasdaq slid 0.8%. Benchmark indexes had fallen more than 1% earlier in the day.

Crude oil bounced on Wednesday morning, following two days of selloffs, even as weekly inventories rose for their fourth week in a row. Domestic stockpiles rose by 7.8 million barrels, roughly double estimates. Prices have been under pressure as worries over oversupply persist and hopes for production cuts from Russia and the Organization of Petroleum Exporting Countries faded. West Texas Intermediate crude oil was up 6.1% to $31.71 a barrel on Wednesday morning.

The services sector, the largest part of the U.S. economy, grew in January at its weakest pace since early 2014, according to the Institute for Supply Management. Services activity, which includes retail and health care, showed a reading of 53.5 in January, down from 55.8 in December. The reading suggested that weakness in the manufacturing and energy sectors has spread over to the services portion of the economy.

The private sector added 205,000 jobs in January, according to the ADP national employment report, in a sign that the labor market continues to show resilience. The official read on nonfarm payrolls will be out on Friday morning. Economists expect 192,000 jobs to have been added to the U.S. economy and the unemployment rate to hold steady at 5%.

"Job growth remains strong despite the turmoil in the global economy and financial markets," said Mark Zandi, chief economist of Moody's Analytics. "Manufacturers and energy companies are...